For several years now, Paul has been a driving force behind the growth of our mobile app company, jacAPPS. Along the way, he has aggregated a wealth of experience about mobile handsets, platforms, software, apps – along with the people who run these companies and produce products that consumers purchase. The demise of the BlackBerry brand, once a juggernaut in the mobile space, has provided textbook lessons for all tech firms – and maybe any company that experiences dominance with the goal of creating a franchise. In today’s post, Paul looks back at BlackBerry and what it teaches us about growing (and cratering) businesses. – FJ
The other day, Lori Lewis shared an article from CNN Money titled “Can Anyone Topple BlackBerry?” Judging from the title, you probably concluded it was written some time ago. It was – November of 2004, to be exact.
A lot can happen in nine years. Back then, this was a safe article to write. BlackBerry had a 90% share of the hot PDA market, and had developed a fascinating pseudonym – “The Crackberry” – based on just how addictive these devices had become in the business community.
While competitors like Palm’s Treo (my old one is pictured here) were trying to cut into Research In Motion’s dominance, the leaders of BlackBerry were sleeping quite well at night. Perhaps at their own expense.
The interesting thing about reading historical analyses is that with the advantage of hindsight, we can easily identify how prescient – or how wrong – prognostications and perceptions turned out – especially those in the corporate office at R.I.M.
And in the case of BlackBerry, the lessons grow deeper because it is not easy to find many brands that fell this hard and this fast (except for maybe MySpace).
The article is linked here, and I’ve pulled out some business life lessons to share with you. Like looking at high school graduation photos, you’ll get a chuckle at just how badly the BlackBerry team analyzed their own fortunes and market position.
But it’s also a cautionary tale for industry and category leaders, especially in the tech and media space. Hubris, insularity, and arrogance are all qualities that conspired to bring BlackBerry down – and it can happen to any brand that dominates its market.
While they’ll probably be teaching college courses about BlackBerry’s failure for decades, here are some of the lessons that all of us should keep in mind:
1. Don’t settle for dominating a small segment of the market. While BlackBerry once enjoyed a 90% share, that only translated to 2 million devices (most of which were owned by businesspeople). That meant there were close to 300 million Americans who made up the potential market that BlackBerry did not connect with. When a competitor – Apple – focused on the mass audience that was not being served, it didn’t take long to blow past R.IM.
The lessons for radio broadcasters are obvious. Companies, clusters, and stations often focus on their share of revenue based on their monthly Miller Kaplan reports. The fallacy is that this is a scorecard against 6% of the advertising revenue and ignores everything else. While it may be an effective way to measure against in-market radio competition, it’s missing the much larger win – the other 90-something-percent of advertising dollars being spent on old and new media providers. Gaining share of radio dollars is desirable, but wouldn’t it be a lot more meaningful if the industry scored itself against the larger universe of dollars in order to grow the business?
2. Pay attention to your competition, no matter how small. One of BlackBerry’s biggest failures was dismissing its competition because of their false belief they owned the market. This is immortalized in this quip from their co-founder, Mike Lazaridis, who “dismisses the idea that RIM can be beaten in the market it practically created.”
The radio industry created . . . . radio. We perfected it and turned it into a major part of American culture. But what’s been done in the past means nothing in the future, because the future is nothing like the past. In 2004 when this story about BlackBerry was written, satellite radio was a fledgling speck on the horizon. Pandora hadn’t been invented yet, and Internet streaming had yet to reach critical mass. Collectively they didn’t amount to much of a threat to radio.
Oops.
3. Respect your competition, learn from them, and then steal from them quickly. In 2009, I went to my first Consumer Electronics Show. We had just entered the apps business and it was exploding. We were only developing for Apple at that time (it was before Android existed), so I had a meeting with the head of BlackBerry’s app division. I listened to him stridently explain to me that his company was reluctantly getting into apps, but was going to keep their involvement limited because they didn’t want to distract their business users. Then I called the office and told them we weren’t going to develop for BlackBerry. Good call, but not a difficult one.
While there are many reasons for BlackBerry’s epic fail, a key factor was not moving quickly to counter Apple’s move into mobile apps. The article reinforces just how badly they missed the market: “With the BlackBerry, you don’t have to decide what software to put on it or how to configure it–there’s none of that. It’s not a do-it-yourself experience.”
If BlackBerry had its strategic finger on the pulse of the market instead of patting themselves on the back, they might have been able to blunt the impact of the iPhone. Remember that it wasn’t until the advent of the App Store (enabling customers to do exactly what R.I.M. scoffed at – customizing their mobile experience) that the iPhone took off.
In radio, we face this challenge all the time. Whether it’s new format competitors or a new feature on Spotify, we need to constantly be on the alert because our grip on the audience is tenuous. Radio has the ability to adapt and adjust quickly, but needs to do more than sit back and wait to see how things sort out before acting.
When Dave Hamilton was programming KQRS in Minneapolis, he was the master at stomping on competitors whenever they emerged. With no delay, he would focus intently on them from the moment they signed on, identify their unique attribute, steal it, improve on it, and own it. Because he had the cume, the morning show, and the brand, the tactic known as “Hamilton Them” worked. R.I.M. could have attacked the competition similarly, using its market lead as a platform to steal the most innovative features from newcomers. Coulda, shoulda, woulda.
4. Innovate, innovate, innovate. Then innovate some more. While the Treo (and eventually the iPhone) had a camera early on, BlackBerry didn’t bother to include this feature until 2006 – two years after this article appeared. After all, why would anyone want a camera with their smartphone – especially businesspeople? While R.I.M. innovated many features since their devices came out in the ‘90s, their inability to imagine how a smartphone could become a hi-tech Swiss Army Knife was a factor in their demise.
In this fast-moving world, the worst attributes a company – or an entire industry – can exude are hubris, satisfaction with the status quo, and arrogance. BlackBerry is a classic example of what not to do, and no matter what business we are in, we can learn from their example.
Anyone want to buy an old Treo?
After a brief stint working for the William A. Robinson marketing services agency in Chicago, where he created campaigns for Philip Morris and Seagram's, Paul struck gold when he was hired as an Account Executive at WRIF-FM in Detroit. This experience launched his sales management career, and four years later, he became the General Sales Manager for KZEW-FM in Dallas, and ultimately, the General Manager for KHYI-FM, also in Dallas. He was lured home to run WDFX-FM in Detroit, before joining Jacobs Media as its General Manager in 1991.
Along with overseeing the day-to-day operations of Jacobs Media, Paul’s main contribution has been the addition of sales consulting services. As an expert in all Rock formats, Paul has made Jacobs Media clients’ untold amounts of money by aiding them in their understanding of how to sell, market, and position their formats via sales training seminars. He has conducted hundreds of client presentations on behalf of Jacobs Media clients, and has aided the Ford Motor Company and Procter & Gamble in improving their understanding of the youth market. Paul is a true "format champion" – someone who believes in the power of branding, and developing radio’s inherent assets.
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Well, there’s a B-School class in a single column. That’s a keeper…LWD
Thanks, Lindsay – I know Paul will be very happy to read that. Thanks for taking the time to comment.
Lindsay (Paul here writing on Fred’s account), glad I could provide the education – not bad for a State College graduate!
I want to thank you for providing such expertise, innovation, and prowess to the Radio Industry– now if I can have the honor of collaborating with you–I will probably work less hours…
Jim Nico, CEO/Founder/Social Network Intermedia “Beyond The Frontier…”
Thanks for the kind words, Jim.
Hey Paul! Great Article!
One of the Co-CEOs got obsessed with buying an NHL franchise and put in failing bids on several teams. This distraction helped grow his flippant “iPhones will never catch on” attitude.
On a side note, these new Blackberrys (Q10) are wicked awesome, but I suspect I will be part of a very small ‘audience’ that finds that out!
-Robinson 95X
Robinson, Windows Mobile phones are awesome too, but like BlackBerry, haven’t captured the imagination of consumers. Apple and Android have gotten so huge that they are dominant. But they should be careful – they need to innovate and stay close to consumer, because whatever works today might not tomorrow. Thanks for the comment.
“Hubris, insularity and arrogance…satisfaction with the status quo…” That’s a perfect and apt description of radio’s leadership.
What radio-centric get-together/convention doesn’t begin with some V or C level exec proclaiming how wonderfully radio is doing…always punctuated with what it still has left rather than where it has made gains, followed by a fatuous dismissal of all new competitors as “not radio”. “If BlackBerry had its strategic finger on the pulse of the market instead of patting themselves on the back, they might have been able to blunt the impact of…” Try this salient point out by replacing “BlackBerry” with “radio”.
I only disagree with one point in this blog – radio has no business worrying about competing with other media for additional shares of ad dollars when it hasn’t meaningfully expanded or enhanced its media or strategic value (it could be argued that the lack of local personalities has actually devalued it as a marketing vehicle) in over 20 years and can’t even hold on to its traditional share of the ad pie a result.
Radio won’t fall or implode as fully or quickly as BlackBerry did, because everyone has one and they don’t need updating the way smartphones do. But radio is analogous to BlackBerry on a pulley system. Will anyone see Paul’s cautionary tale for what it is, or will the all of the 2014 radio conventions start with speeches with the words “still”, “not radio” and “streaming”?
Bob (Paul here writing in Fred’s account): I get your point about competing with other media, but in fact, radio has done a decent job with databases, text programs, and mobile. While I realize that the industry doesn’t have the expertise its pureplay competitors have, some decent efforts have been made. But hopefully this “cautionary tale” will help the industry put where we are in perspective and accelerate efforts. Hopefully. And thanks for the great comment.
Database…really…that’s so 1999. Text is so 2007. Both still worth doing, but hardly good examples of staying in the forefront IMO. As for moblie…have you listened to one those streams lately? Still PSAs and /or smooth jazz where the terrestrial ads are. I (and lots of others) wrote blogs/columns about this issue back when databases where the hot new thing; its been well over 10 years now and still no progress.
This reminds me of Cleveland sports fans and their perennially losing teams. If everyone keeps making excuses for lousy performance, they’ll never get better.
Hey, Bob – it’s Fred writing as…Fred. Well in Cleveland, at least most the fans have the good sense not to show up when the product’s lousy. In radio’s case, the industry has had a checkered track record when it comes to innovation, adapting to digital, and understanding the consumer mindset. But the good news is that Mr. Analogy (aka Paul) has found some very nice parables in the BlackBerry story. Hopefully, the people who ought to read it will and give some consideration to the costs of overplaying a good hand and letting the competition in the door. BlackBerry was screwed – they were “out-innovated” by Apple, and then Android. In radio’s case, broadcasters still have some viable tools in the tool kit. Thanks for being your irascible self.